In this video, I will be going over Roku's (ROKU 2.21%) Q1 earnings report and call. Roku keeps showing why it's the No. 1 streaming service in the US. The competition (Amazon, Google, Apple) will have a hard time catching up. You can find the video below, but here are some highlights.
- The company reported total net revenue of $734 million, up 28% year over year (YOY), with platform revenue increasing 39% and player revenue decreasing 19%. That decrease is the result of ongoing supply chain issues.
- Gross profit was up 12% YOY to $365 million.
- Roku's active accounts reached 61.3 million, and streaming hours increased by 1.4 billion to 20.9 billion hours.
- Average revenue per user (ARPU) grew 34% to $42.91.
- During the call, management said that it expects operating system (OS) makers to consolidate. Roku's main goal is to build the best OS possible; you can't say the same for the competitors. The amount of money needed to compete at the top is a lot, so the new players will need to play catch-up, which is not sustainable for the long term.
- Management was also very welcoming to the idea that Netflix might offer an ad-supported tier, saying that ads offer a lower price to entry for consumers, which leads to more engagement and better monetization for the company.
- For the full year, management expects total net revenue growth to be 35% YOY.
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*Stock prices used were the closing prices of April 28, 2022. The video was published on April 29, 2022.